AbstractA bargaining model of EC agricultural policy formation is formulated. The model allows for more explicit consideration of political factors than is possible in standard political economy models. It shows how the political system in Germany has increased the power of German farm interests relative to farm interests elsewhere in the EC. The paper recognizes CAP negotiations are an on‐going process. Results of the previous bargaining round form the basis for the current round and give momentum to price changes. Understanding this momentum provides insight into the fluctuating price supports that have characterized the CAP.